April 25, 1996

Mr. Enrique Iglesias, President
The Inter-American Development Bank
1300 New York Avenue, NW
Washington, DC 20577

Dear Mr. Iglesias:

We are writing to comment on the Independent Investigation Mechanism which was created in August, 1994 by the Inter-American Development Bank (IDB). First, we would like to state that we strongly support the creation of an independent investigation mechanism at the IDB. As the World Bank's Inspection Panel has demonstrated, such a mechanism can provide promising opportunities for locally affected persons to raise their concerns about bank activities. Such a mechanism can also help the bank to identify and correct potential problems in project design and implementation, before irreversible environmental or social damage has occurred. It is in this spirit that we look forward to working with you towards making the IDB Investigation Mechanism a viable and important tool for improving accountability and project quality.

Initially, we would like to express our concern with the apparent failure to mobilize the Mechanism. The Mechanism has been in place for over a year, yet it remains inactive. In large part, this is because few people know that the Mechanism exists. The failure to mobilize the mechanism may also be a result of fundamental flaws in the mechanism. The main problem is that the Mechanism lacks the guarantees of independence and transparency necessary to engender public confidence and make the mechanism effective. In an effort to improve the Mechanism, we offer the following comments and suggestions.

Ensuring Independence from Bank Management.

The IDB should allow members of the Roster to determine the eligibility of a claim and to make the initial recommendation of whether to proceed with an investigation. This would greatly increase independence from Bank management and increase its credibility. We frankly doubt whether the current mechanism, so dependent on Bank Management, can successfully fulfill its mandate to provide a meaningful, objective forum for oversight and protection of the rights of affected parties. That the existing structure deprives the Roster of authority and reduces the ability of the Mechanism to operate as an independent body. This in turn weakens the potential for the Mechanism to promote transparency and accountability.

For example, the initial determination of the eligibility of claims is vested with the President instead of the Roster of Experts. In addition, only the President is empowered to make a recommendation to the Board of Executive Directors regarding outside requests for inspection. Even the requests for inspection must be filed with the office of the President, rather than an independent body. This lack of an independent structure cripples the Mechanism before it even begins, because Bank management (as headed by the President) has an inherent conflict of interest with respect to potential claims. The logical and natural inclination of Bank management will be to deny the need for a panel investigation. We recommend that the Bank give the screening function to the Roster of Experts (which would make the procedure more like that followed by the World Bank Inspection Panel).

Increasing Public Awareness of the Mechanism.

The existence of the Investigative Mechanism is virtually unknown. The IDB should provide a budget to the Roster members to publicize the availability of the Mechanism and to inform citizens how to use it. A brochure, a page on the World Wide Web and other inexpensive methods for distributing information about the Mechanism should be used. Of course, all efforts to inform the public and any publications prepared to describe the Mechanism should be multi-lingual, at the least in Spanish and English. Furthermore, descriptions of the Mechanism and its procedural requirements and contact information should be made immediately available in the Public Information Centers in each country office.

Creating a Permanent Secretariat.

The IDB should create a permanent secretariat for the Panel (rather than an ad hoc Secretariat as is envisioned by paragraph 5.4 of the Rules of Procedure). This Secretariat would serve a number of functions. The Secretariat would support the Roster Members and facilitate communication with Roster. It would provide a permanent address, telephone number, and contact person. It could help to increase public awareness of the Mechanism. It would also be a consistent source of information and advice about the Mechanism for interested parties, particularly parties interested in filing a request. Such pre-request consultations have been important in the experience of the World Bank Inspection Panel, both to help affected parties strengthen their requests and to discourage requests that do not meet the eligibility requirements. Requests should be filed initially with the Secretariat, and the Secretariat should maintain a public registry to track the filing and progress of requests.

There is currently no way for interested parties to contact the Roster of Investigators, either for information about the Mechanism or to explore the requirements for filing a claim. In fact, we have been informed that the only way to contact the Roster Members is through the President's office. We would like to request that you kindly forward a copy of this letter to the members of the Roster, as we are unable to do so ourselves.

Issuing Operating Procedures.

The Roster Members, or a subcommittee of the Roster Members, should be asked to issue a set of more detailed operating procedures that clarify issues not covered in the resolution creating the mechanism. Issues that the Roster Members should clarify include, for example: how exactly to file a request, where to file a request, what information to include in the request, what procedures will be followed in conducting any investigation, and how panels will publish the results of their investigations. These operating procedures should be made available for public comment before they are finalized.

Affected Parties

The definition of an "affected party" in Paragraph 3.2 is both overly broad and vague. It is not clear what constitutes a "community of persons" or a "grouping of individuals." For purposes of clarity and to further the goals of transparency and accountability, these terms, if used at all, should be defined as two or more individuals who are adversely affected by the action or omission of the Bank. The rule on local representation (Paragraph 3.3) is also problematic and places unlimited discretion with the Executive Directors. All that should be required in an initial request for inspection is a statement explaining why a requestor does not believe appropriate representation to be locally available.

We believe these recommendations, if adopted, would greatly strengthen the Investigation Mechanism. We look forward to working with you to help empower the IDB Investigation Mechanism and to make the Mechanism live up to its potential for helping the Bank to improve the planning and implementation of projects. We would welcome the opportunity to meet with you to discuss the Mechanism and the recommendations contained in this letter.

Sincerely,

Dana Clark, David Hunter

Center for International Environmental Law

On behalf of:

Andrea Durbin, Kay Treakle, Latin American and Caribbean Program, Friends of the Earth Bank Information Center

Larry Williams, John Ruthrauff, Sierra Club Center for Democratic Education

Barbara Bramble, Orestes Papi, Coordinadora Regional de Investigaciones, National Wildlife Federation Economicas y Sociales (CRIES)

Douglas Hellinger, Donald K. Anton, Professor of Law. Development Gap University of Melbourne Law School